By EDWARD WYATT

Published: June 18, 2010

WASHINGTON -- House and Senate negotiators agreed Thursday to broaden the scope of a new set of audits of the Federal Reserve by the Government Accountability Office to include transactions involving the Fed's discount window and open market operations. But the Federal Reserve dodged attempts to extend Congressional review over its monetary policy decisions.

The Senate had previously approved a provision that would require a government audit of the Federal Reserve's emergency lending authority, a move that arose in response to the Fed's actions in the 2008 financial crisis. But the House-Senate conference committee wanted to go further, subjecting the Fed to regular audits of its routine operations.

As negotiators dived into a third day of trying to produce a final version of the financial regulatory overhaul, they fell behind the tight schedule outlined last week by Representative Barney Frank of Massachusetts and Senator Christopher Dodd of Connecticut, the Democratic leaders who have shepherded the bills through the process.

That schedule calls for the completion of the conference by the end of next week, with a bill approved and sent to President Obama for his signature by Independence Day.

But on Wednesday and Thursday, debate began to stretch beyond the expected time on several issues, including whether financial advisers should be subject to a fiduciary duty requirement, limits on executive compensation and the ability of shareholders to nominate directors for a company's board, and whether the Securities and Exchange Commission should be self-financed.

House members also wrestled Thursday with a subject that has been a sticking point in both houses of Congress during the months of trying to develop a regulatory bill: what agency would have the authority to liquidate a failing financial company, and how money would be provided for the liquidation.

The House and Senate negotiators did agree to several changes, including the removal of a Senate provision that would have made the president of the New York Federal Reserve Bank a political appointee subject to confirmation by the Senate.

Instead, the conference committee agreed to leave the appointments of the presidents of each regional Fed bank to their respective boards while excluding the representatives of member banks on those boards from voting on those appointments.

Senator Jack Reed, Democrat of Rhode Island, argued that because the president of the New York Fed was the only permanent member of the Fed's Open Market committee, which sets interest rate policy, he should be subject to Senate confirmation. ''I think someone in this country who can make those kind of decisions that affect us all should be subject to the nomination and confirmation process,'' Mr. Reed said.

The committee's agreement on regular audits of the Fed would require the disclosure within one year of the names of entities that received emergency credit from the Federal Reserve, as well as the disclosure of the results of the audit of the open market operations and discount window transactions two years after those transactions were entered into.